The combination of shrinking packer profits and smaller feedyard losses over the past six weeks has reduced the packer/feeder margin spread by 27%, according to the Sterling Beef Profit Tracker.
Improvements in feedlot margins were ever so slight last week due to a $1 gain in cash fed cattle prices. Pork producers saw a $5 per head improvement.
Beef packers saw their margins decline to the lowest level since before the Tyson packing plant fire August 9 as beef cutout prices declined and cash cattle prices increased.
After reaching historic levels earlier this fall, beef packer margins have experienced steady declines over the past month as cattle prices have increased.
Cattle and hog feeding margins declined significantly the week ending April 25, 2020, as harvest capacity at both beef and pork facilities was significantly reduced by the coronavirus pandemic.
Sharply higher beef cutout values produced windfall profits for beef packers last week while cattle feeders saw closeouts with average losses about steady, according to the Sterling Beef Profit Tracker.
